Nigeria’s oil revenue rises by 4.3% in second quarter 2014

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Total federally collected revenue for the second quarter of 2014 stood at N2.602 trillion, representing an increase of 4.3 per cent above the N2.496trillion received in the first quarter of the year.

The figure however showed a decline of 4.3 per cent below the proportionate quarterly budgeted estimate.

At N1.796 trillion, gross oil revenue receipts, which accounted for 69 per cent, exceeded the proportionate budget estimate marginally by 0.2 per cent. It however fell by 0.7 per cent below N1.809 trillion received in the preceding quarter.

The increase in oil receipt relative to the proportionate budget estimate was attributed largely to the rise in the other oil revenue during the review period.

A breakdown of the gross oil revenue showed that receipt from crude oil and gas sales stood at N577.41 billion as against N516.63 billion realized in the previous quarter of the year.

Revenue from petroleum profit tax (PPT) and oil royalties from the oil companies was about N838.89 billion against N874.47 billion in the first quarter, while revenue from other sources declined from N417.76 billion in the first quarter to N379.23 billion.

Non-oil receipts of N806.45 billion, or 31 per cent of the total, was below the proportionate budget estimate by 13.1 per cent, but about 17.4 per cent above N686.89 billion received in the preceding quarter.

The decline in non-oil revenue to the proportionate budget estimate was attributed to the decline in receipts from Education Tax and Federal Government independent revenue.

The components of gross non-oil revenue of N824.04 billion, which was above about N686.27 billion realized in the last quarter, included VAT (N194.15 billion); Company Income Tax (CIT) and other taxes, N404.20 billion; Customs & Excise Duties, N136.28 billion and revenue from other sources, N89.41 billion.

Compared with the receipts in the first quarter of the year, gross non-oil revenue was higher by N137.77 billion, or 20.08 per cent, while VAT was lower by N19.65 billion, or 10.12 per cent, and CIT and other taxes higher by N226.08 billion, or 126.93 per cent.

Revenue earnings from Customs & Excise Duties for the quarter rose by N14.65 billion, or 12.05 per cent, while earnings from other sources declined by N83.31 billion, or 48.23 per cent.

Federal Government share of the revenue was N864.15 billion was lower than both the proportionate budget estimate and the receipts in the previous quarter by 19 and 5.3 per cent respectively.

Of the amount, the allocation to the Federal Government was N769.48 billion, or 89 per cent; SURE-P and other N48.88 billion, or 5.7 per cent; VAT N27.96 billion, or 3.2 per cent and independent revenue N17.83 billion or 2.1 per cent.

Total expenditure at N1.194trillion indicated fiscal deficit of N329.27 billion, or 8.8 per cent in the second quarter, compared with the 7.1 per cent above the level in the preceding quarter’s deficit of N241.1 billion and N202.7 billion respectively.

The development relative to the proportionate quarterly budget estimate was attributed to the decline in the capital component during the quarter.

A breakdown of the expenditure component showed that the recurrent expenditure accounted for about 68.8 per cent, while capital and statutory transfers segment accounted for 23.8 per cent and 7.4 per cent respectively.

Further details of the of the recurrent expenditure showed that the non-debt component accounted for 66.6 per cent, while debt service payments component accounted for the balance of 33.4 per cent.

The fiscal operations of the Federal Government resulted in the estimated deficit of N329.37 billion, compared with about N202.7 per cent and N241.05 billion in the first quarter and the proportionate quarterly budget estimate respectively.

The Federal Government retained revenue for the quarter was lower than both the proportionate budget estimate and the receipts in the first quarter by 19 and 5.3 per cent respectively.

Details of the revenue showed that the Federal Government share from the Federation Account was about N769.48 billion; Subsidy Reinvestment and Empowerment Programme (SURE-P) N48.88 billion; Value Added Tax (VAT) N27.96 billion and revenues from independent sources N17.83 billion.

Total allocation to the three tiers of government for the second quarter of 2014 was put at N1.927 trillion, compared with N1.828 trillion and N2.095 trillion in the previous quarter and the proportionate quarterly budget estimate respectively.

Crude oil production, including condensates and natural gas liquids, was estimated at an average of 1.91 million barrels per day (MBD), or 173.81 million barrels for the quarter.

Crude oil export stood at 1.46 million barrels per day (MBD), or 131.4 million barrels for the quarter, while deliveries to the refineries for domestic consumption remained at 0.45 MBD or 40.95 million barrels for the quarter.

The average price of Nigeria’s reference crude, the Bonny Light rose by 1.7 per cent above the level in the first quarter.

World crude oil demand in the second quarter of 2014 increased by 0.8 per cent.

Of the gross federally-collected revenue during the quarter, net deductions and transfers totaling N1.626 trillion was transferred to the Federation Account for distribution among the three tiers of government and the derivation fund.

Details of the sharing showed that the Federal Government’s share was N769.48 billion and N27.96 billion from the VAT pool Account, while the state and Local Governments received N390.29 billion and N300.90 billion, in addition to N93.19 billion and N65.23 billion from the VAT pool Account respectively.

The balance of N165.2 billion went to the nine oil producing states as 13 per cent derivation fund.
Besides, about N106.65 billion was distributed among the three tiers of government as SURE-P and 13 per cent derivation fund as follows: Federal Government (N48.88 billion), State governments (N24.79 billion), Local Government N19.11 billion and 13 per cent derivation (N13.86 billion).

The sum of N7.62 billion, being last installment of the refund to the Federation Account by the NNPC, was shared among the state and Local governments and 13 per cent as follows: State governments (N3.74 billion); Local Governments (N2.88 billion) and 13 per cent derivation (N0.99 billion).

Statutory allocation to states, Local Governments

Statutory allocation to the 36 states and the Federal capital Territory, FCT, including the Federation Account, 13 per cent derivation fund and VAT stood at N692.08 billion during the quarter.

The allocation was about 3.4 per cent higher than the level I the first quarter, but 4.3 per cent lower than the proportionate quarterly budget estimate.

Further details showed that receipts from the Federation Account was about N598.89 billion, or 86.5 per cent, while VAT contributed N93.19 billion, or 13.5 per cent to the total.

The Federation Account was about 5.6 per cent above the level in the first quarter, but lower than the proportionate quarterly budget estimate by 4.3 per cent.

Receipts from the VAT pool Account falling below the level in the preceding quarter and the proportionate quarterly estimate of 9.2 and 8.1 per cent respectively.

Equally, total receipts by the 776 local governments during the quarter stood at N388.13 billion, which was above the level for the first quarter by 3.6 per cent, although lower than the proportionate quarterly budget estimate by 9.3 per cent.

Of the total amount, allocation from the Federation Account was N322.9billion, or 83.2 per cent, with VAT Pool Account accounting for the balance of N65.23 billion, or 17.8 per cent.

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Bassey Udo is PREMIUM TIMES’ Business & Economy Editor. He has covered finance, energy, oil, gas & extractive industries for over a decade. He is a winner of the Wole Soyinka Award for Investigative Journalism, and the Thomson Reuters Foundation (Wealth of Nations) Award for Business Reporting. Bassey is an alumnus of the U.S. International Visitors Leadership Programme. Twitter: @ba_udo

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